It has 120 million customers, takes $10 billion in bookings a month and, as it turned out this year, more or less had the French president on speed dial, doing his bidding. But can Uber make a profit?
The San Francisco-based carpooling giant cried out in ‘free cash flow’, as it puts it, last quarter after racking up $23bn (£20bn) in losses in its first decade intoxicating. On Tuesday, investors will see if it can repeat the trick in its third-quarter results.
Since its wet IPO in May 2019, Uber’s stock price has been the kind of jaw-dropping ride one would expect from a hopelessly inexperienced driver who relies on flimsy satellite navigation. It hit rock bottom, like just about all transport stock, when the Covid lockdowns started in 2020. By 2021 it had tripled in value, when people realized they were going to need more pizza delivered .
But the last year has seen a steady decline. For many, just going out and spending is a pre-Covid, pre-crisis habit – and with driver shortages, soaring fuel prices and annoying old stuff like labor laws weighing on Uber, the kind of loss-leading rates that attracted a generation of users cannot be sustained.
The only boost for shareholders this year came with the publication of Uber Files – a Guardian-conducted an investigation into the company’s past harmful practices, from covert lobbying to deceiving police and exploiting protests. The stock price jumped about 50% in July as capitalists everywhere marveled at how far Uber would once go to skirt regulations and get the ear of the best dog in town.
Yes, they were the future once. But the days when executives said they were “fuckin’ illegal” or that “violence guaranteed[s] successes” have passed, while Emmanuel Macron probably picks up the phone a little less to send SMS now. Uber was known to be a disruptor. Now even that label feels so Liz Truss.
Instead, Uber is trying to transform itself into the centrist father of the world of technology and mobility. Chief executive Dara Khosrowshahi came in vowing to be a better partner for cities and was pushed to be a better partner for Uber’s “partners” – drivers, who unions and some judges say should be considered employees and paid accordingly.
The company’s robotaxi dream has been parked, for now, with humans back in favor. In some US cities, Uber has even made unlikely alliances with the taxi industry of yore – putting, for example, New York’s yellow cab drivers on its app. In London, Uber’s license was renewed surprisingly without drama this year, as it extended olive branches to the mayor and applauded clean air and EV charging schemes.
Even the most daring things are played down – as Uber Eats Canada now offers to bring weed to users’ doorsteps, the company says it’s a move that could thwart the criminal market and reduce driving under the sun. drug effect.
Regardless of the product, total revenue from deliveries like Uber Eats now roughly matches those from its rides, as people adjust to a life spent more at home. Freight is a growing patch for Uber, and it recently launched a new advertising division to capture users at every step, from booking on the app to the car ride itself. The ads will potentially generate $1 billion a year from 2024, but also slight desperation, as market doubts about big tech stocks engulf the company.
Uber is of course not the first global empire built on a dodgy past that executives would love to airbrush. And it’s still valued at $55 billion, which is pretty good for a taxi company. Quite where the modern diet is heading, or making profits in a post-pandemic era, remains unclear. But the decline and the fall still seem far away.